Legal advice: The right to know

Soon, all employees will know business decisions.

By Rebecca Caws of thePublican.com's team of legal experts from London solicitors Joelson Wilson.​

In an ideal world, people would be open with one another and help each other to achieve common aims. Of course, in the real world this sort of harmony is rarely found, particularly in the working arena, where the corporate agenda and competitive colleagues can often subdue the community spirit.

This is all set to change when the EC National Information and Consultation Directive becomes part of UK legislation in March 2005. The directive aims to promote mutual trust and transparency within businesses and enhance the exchange of information and consultation between employers and employees on various aspects of the business. Consultation has been taking place over the past two years and draft regulations are expected shortly.

So what does this mean to UK businesses? The current proposals are that if 10 per cent of the employees of a business submit a written request for a works council, the business is obliged to set one up. This will apply to businesses with 150 or more employees from March 2005, and to businesses with over 100 and then over 50 employees from March 2007 and March 2008 respectively.

The works councils will be made up of employee representatives chosen by ballot with a proposed ratio of one representative per 50 employees. While employers are already obliged to inform and consult on certain matters such as redundancy and business transfers, these proposals would give employees further rights to be informed and consulted on such matters as:

• The economic situation of the business
• The probable development of employment (including any threat to employment)
• Any decisions likely to lead to substantial changes in work organisation.

Are employees likely to see works councils as beneficial? The chance to feel more involved in the business for which they work is likely to be popular with employees. After all, we spend a large percentage of our week at work and many of us put in considerable effort.

For example should an assistant bar manager, who is unlikely to be involved in major issues, attend certain meetings with a company's area manager, a works council may enable the assistant bar manager to learn more about the business and understand some of the issues facing the upper management and board members.

It is hoped that such transparency will create mutual trust and even a sense of pride within the business, but will this persuade employers that divulging important information to employees is worthwhile?

The short answer is that employers will have little choice in the matter. Any employer who fails to establish a works council where a valid request has been submitted may well face a penalty fee. There will, of course, be exceptions for highly sensitive information that may jeopardise the business, but an employer's business will soon be everybody's business, at least to the extent that it may affect them.